Adobe's reported continued growth in its cloud subscriptions, but not enough to satisfy investors.
Its Q2 2016 revenue rose 20.4 per cent year-on-year to US$1.4 billion on the back of Creative Cloud subscriptions: the digital media business piled on 26 per cent year-on-year to hit $943 million, with Creative Cloud chipping in $755 million, up 37 per cent year-on-year.
Net income for the quarter was $244.1 million.
Analysts had expected slightly more out of Creative Cloud, and according to Reuters this, combined with a failure to upgrade its profit forecasts (as it did in the March quarter), led investors to mark down the stock. It fell 4.1 per cent to $95.60 in after-hours trading.
The company offered a Q3 forecast of between $1.42 and $1.47 billion, which would keep it on track for year-on-year growth between 16.4 and 20.5 per cent.
In line with its move to subscription-based revenue, product sales – the stuff you buy in boxes with a drink coaster inside – continued to fall, from $275 million for Q2 2015 to $197 million in the quarter just ended.
The cloud is also giving Adobe a nice annuity revenue: it says the digital media business' annualised recurring revenue was $3.41 billion exiting the quarter, a $285 million quarter-on-quarter increase.
Adobe's financial publications are here. ®